Stanley Black & Decker Up to Neutral

The upward revision on Stanley Black & Decker’s recommendation followed the Dec 12 announcement of the company’s financial outlook for 2014. Earnings per share, excluding one-time charges, are predicted at $5.30–$5.50, up 9.1% year over year at midpoint.

Stanley Black & Decker also intends to use its free cash flow for acquisitions, reducing debt levels and rewarding shareholders before returning to its 50/50 allocation strategy post 2015.

We believe the industrial tool maker has solid long-term growth prospects and seems well positioned to benefit from the increase in industrial tools demand globally and its rising exposure to emerging markets. Year to date, the company has provided a return of 9.6%.